Anti-piracy outfit Rightscorp has filed its latest set of financial results and they reveal yet more misery for the company. Its traditional revenue stream, comprised of cash settlements from alleged BitTorrent pirates, is down 48% on the same period last year. This contributes to the company turning in net losses of $1.45 million for the first nine months of the year. But could value lie elsewhere?

For the past several years, anti-piracy outfit Rightscorp has been trying to turn piracy into profit. The company monitors BitTorrent networks, captures IP addresses, then attempts to force ISPs to forward cash settlement demands to its subscribers.

Unlike other companies operating in the same area, Rightscorp has adopted a “speeding fine” type model, where it asks for $20 to $30 to make a supposed lawsuit go away, instead of the many hundreds demanded by its rivals. To date, this has resulted in the company closing more than 230,000 cases of infringement.

But despite the high numbers, the company doesn’t seem to be able to make it pay. Rightscorp’s latest set of financial results covering the three months ended September 30, 2017, show how bad things have got on the settlement front.

During the period in question, Rightscorp generated copyright settlement revenues of $45,848, an average of just $15,282 per month. That represents a decrease of 67% when compared to the $139,834 generated during the same period in 2016.

When looking at settlement revenues year to date, Rightscorp generated $184,362 in 2017, a decrease of 48% when compared to $354,160 generated during the same nine-month period in 2016.

But as bleak as these figures are, things get much worse. Out of these top-line revenues, Rightscorp has to deal with a whole bunch of costs before it can put anything into its own pockets. For example, in exchange for the right to pursue pirates, Rightscorp agrees to pay around 50% of everything it generates from settlements back to copyright holders.

So, for the past three months when it collected $45,848 from BitTorrent users, it must pay out $22,924 to copyright holders. Last year, in the same period, it paid them $69,143. For the year to date (nine months ended September 30, 2017), the company paid $92,181 to copyright holders, that’s versus $174,878 for the same period last year.

Whichever way you slice it, Rightscorp settlement model appears to be failing. With revenues from settlements down by almost half thus far this year, one has to question where this is all going, especially with BitTorrent piracy volumes continuing to fall in favor of other less traceable methods such as streaming.

However, Rightscorp does have a trick up its sleeve that is helping to keep the company afloat. As previously reported, the company has amassed a lot of intelligence on pirate activity which clearly has some value to copyright holders.

That data is currently being utilized by both BMG and the RIAA, who are using it as evidence in copyright liability lawsuits filed against ISPs Cox and Grande Communications, where each stand accused of failing to disconnect repeat infringers.

This selling of ‘pirate’ data is listed by Rightscorp in its financial reports as “consulting services” and thus far at least, it’s proving to be a crucial source of income.

“During the three months ended September 30, 2017, we generated revenues of $76,666 from consulting services rendered under service arrangements with prominent trade organizations,” Rightscorp reports.

“Under the agreements, the Company is providing certain data and consultation regarding copyright infringements on such organizations’ respective properties. During the three months ended September 30, 2016, we had no consulting services revenue.”

Year to date, the numbers begin to add up. In the nine months ended September 30, 2017, Rightscorp generated revenues of $224,998 from this facet of their business, that’s versus zero revenue in 2016.

It’s clear that without this “consulting” revenue, Rightscorp would be in an even worse situation than it is today. In fact, it appears that these services, provided to the likes of the RIAA, are now preventing the company from falling into the abyss. All that being said, there’s no guarantee that won’t happen anyway.

To the nine months ended September 30, 2017, Rightscorp recorded a net loss of $1,448,899, which is even more than the $1,380,698 it lost during the same period last year. As a result, the company had just $3,147 left in cash at the end of September. That crisis was eased by issuing 2.5 million shares to an investor for a purchase price just $50,000. But to keep going, Rightscorp will need more money – much more.

“Management believes that the Company will need an additional $250,000 to $500,000 in 2017 to fund operations based on our current operating plans,” it reports, noting that there is “substantial doubt” whether Rightscorp can continue as a going concern.

But despite all the bad news, Rightscorp manages to survive and at least in the short-term, the piracy data it has amassed holds value, beyond basic cash settlement letters. The question is, for how long?